I’ve always been excited by using our knowledge of how our brains work to create better marketing, advertising, and sales strategies. That led me to write Brainfluence: 100 Ways to Persuade and Convince Consumers with Neuromarketing (Wiley, 2011) as well as my blog Neuromarketing. I always emphasize practical applications, not theory. I’m the founder of Dooley Direct, a marketing consultancy, and I co-founded College Confidential, the leading college-bound website. That business was acquired by Hobsons, a unit of UK-based DMGT, where I served as VP Digital Marketing and continue in a consulting role. I’ve spent years in direct marketing as the co-founder of a successful catalog firm, and before that directed corporate planning for a Fortune 1000 company. You can learn more about me and my speaking at RogerDooley.com. Follow me on Twitter at @rogerdooley, or on Google Plus at Roger Dooley.

Schmoozing Still Works!

At at time when technology seems to be putting the squeeze on old-fashioned human contact, there’s plenty of research data to show that schmoozing still opens doors and gets deals done.

The latest evidence comes from a survey of 300 business buyers found that a personal connection with a caller greatly increased the probability of a callback – five times more likely for any kind of personal connection, eleven times more likely for a direct connection.

Surveys asking people to predict behavior are notoriously unreliable, but there’s other data showing the powerful impact of even a modest connection. In my book Brainfluence, I devote a chapter to “schmoozing.” One rather startling finding comes from a study performed by researcher Al Roth.

Roth used The Ultimatum Game, a clever experiment in which one subject must divide a small amount of money, say, $10, between himself and a second subject. If the second subject agrees with the split, both keep their share of the money. If the other person rejects the split, though, nobody gets any money. In its basic form, it shows that humans place a value on fairness. While a totally rational economist would accept even a mere $1 (since that’s better than the alternative of zero for a rejected offer), real people tend to reject splits that heavily favor the first subject. In fact, in the standard game only half of the offers are “fair” – arbitrarily defined as both subjects getting $4-6. About a third of the time, the deal is rejected and nobody gets any money.

Roth tried a variation on the standard game in which he let the subjects chat face to face for ten minutes before playing. This was pure socializing – they didn’t know the rules of the game they’d play, and there was no discussion of strategy. This simple bit of schmoozing had a dramatic impact on the game results. After the face to face chat, 83% of the deals were “fair,” and just 5% – one out of 20 – resulted in rejection and loss of money for both subjects.

Socializing dramatically increases odds of a successful deal.

Two facts stand out:

The number of fair offers increased dramatically after a short chat.

Even if the offer was “unfair” the second subject accepted it two thirds of the time.

It’s remarkable that a short “get to know you” conversation could yield such a remarkable change in behavior. Without the chat, one in three deals didn’t get done; with the chat, the failures dropped to one in twenty!

The lesson for business people is that establishing a human connection before getting down to business is critically important. As the survey I described above shows, it’s all too easy to reject any overture from a stranger. Once there’s a personal connection, both parties are more motivated to cooperate.

In person or on the phone, that means that it makes sense to chat about something other than business for a few minutes at the outset of a conversation – family, pets, golf, the previous weekend, etc. – anything that will humanize the parties and, perhaps, uncover similar interests.

Social Media Schmoozing Social media channels offer a huge new opportunity to get to the next phase of contact. Getting a phone call returned that will pave the way for a face to face meeting will be a lot easier if a relationship has been established on Twitter, Facebook, LinkedIn, or other channel.

Conferences and Travel This research also bears out the continued relevance of conferences and trade shows. These venues offer the chance both to socialize with existing business prospects and clients as well as encounter new ones. People tend to be very approachable at such events making an initial social contact far easier than attempting to schedule a call or appointment. The main obstacle to overcome is the time pressure, particularly in an exhibit hall where exhibitors may not be able to spend much time with each visitor, and where the attendees themselves are trying to cover many booths in a short time frame. More casual networking events, receptions, etc. offer better opportunities for relaxed conversation before any business talk.

In person travel to meet with clients and prospects has an important place, too. If possible, avoid jumping directly into a big business meeting upon arrival; if the schedule permits, try to schedule some informal time first.

In short, don’t be all business, all the time. A few minutes of pre-business schmoozing will greatly increase the odds of getting a deal done, or at least moving on to the next phase of the relationship.

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Loyaltics, I agree that real liking (not the Facebook kind!) is a huge asset in a business relationship. I think what the Ultimatum Game test showed was more recognizing that the other player was a real person, since a ten minute social conversation would be rather short to develop much “liking” between so many of the participants.

It is a well known fact that people feel uncomfortable against people they don’t know. Signing a deal got risks for the buyer. He is giving money for what? Specifically in business they might get under big pressure if bad quality or wrong things get delivered. It doesn’t matter if the fault is on the side of contractor or the requirements are simply wrong. They feel more comfortable if they have someone they know he listens to their worries. If not they will take the market leader, so they can argue that the delivered stuff is “standard”.

Advice from an excellent manager I know: Build a relationship with your client managers.

Thank you for putting together such an interesting article, being English ‘Schmoozing’ isn’t something of a familiar term, however having worked for american employees this was something that was always stressed as an important skill to have.

Really enjoyable piece of reading, and one that i felt compelled to share with many colleagues, who in turn agreed and found just as interesting given the experiment that you pointed out.